Propnex Reports 1Hfy2024 Earnings 19 Mil Down 138 Y O Y
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PropNex, Singapore’s top real estate agency, recently announced an earnings of $19 million for the first half of fiscal year 2024, ending on June 30. This marks a 13.8% decrease compared to the $22.1 million reported in the same period last year. The decline in earnings can be attributed to a drop in revenue during the same period. The agency recorded a revenue of $345.6 million, which is a 5.1% decrease from the previous year.
The main reason for the lower revenue was a decrease in commission income from project marketing services. The group saw a decline of 19.6% in revenue from this segment, which amounted to $91.3 million. According to PropNex, this was due to a decrease in new launches in the private residential market. In the first half of 2024, developers sold 1,889 new homes, which is a significant drop of 44.2% from the previous year.
On a positive note, there was an increase in private resale transactions during the same period. A total of 6,491 private homes were sold, which is a 16% growth compared to the first half of 2023. The HDB resale market also showed resilience, with a 6.9% increase in transactions of 14,420 flats.
This rise in secondary market transactions resulted in an increase in commission income from real estate agency services, which grew by 1.3% to $251.9 million. Ismail Gafoor, executive chairman and CEO of PropNex, highlighted that the private resale market accounted for 70.9% of all private residential transactions in the first half of 2024. He also predicted that the resale market would drive private home sales for the rest of the year, with an estimated 13,000 to 14,000 transactions.
The company has proposed an interim cash dividend of 2.25 cents per share for the first half of fiscal year 2024. Looking into the future, PropNex has revised its forecast for private new home sales for 2024. This is due to fewer new launches and the continued impact of cooling measures implemented last year. The agency now expects between 5,500 and 6,000 private new home sales, which is lower than their initial forecast of 6,000 to 6,500. They also anticipate a 4% to 5% increase in overall private home prices for the year, a decrease from the 6.8% growth seen in 2023.
Despite the challenges in the market, PropNex predicts a resilient demand for HDB resale flats. They project a sales volume of 28,000 to 29,000 units for this year, which is higher than the 26,735 flats sold in 2023.